Gary Shilling: Commodities Bubble Is About to Burst

Commodities are not only about to end their bull run but are going to come crashing down, says investor and author A. Gary Shilling.

Speculators and exchange-traded funds have fueled the buying spree, making the market volatile in the process.

China has supplied the demand, but the once red-hot Asian giant no longer needs as much oil, base metals and other commodities as its economy enters a cooling phase.

"With growing evidence of a hard landing in China, the scales are dropping from speculators' eyes and industrial commodity prices, including copper, are swooning. As in the past, almost overnight, tales of perpetual shortages in key industrial inputs are magically disappearing as unaccounted-for stockpiles materialize," Shilling writes in the Christian Times Monitor.

"Talk about bubbles! If commodities haven't been in one, I don't know what a bubble looks like. And I've studied a lot of them over the years and concentrated on predicting their demises."
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Shilling, who predicted the U.S. housing collapse, adds that commodities producers such as Brazil are going to suffer when the bubble bursts.

Others have made bearish calls on China, including hedge fund managers Jim Chanos of Kynikos Associates and Hugh Hendry of Eclectica.

But famed commodities bull Jim Rogers says they are all wrong, as China may slow down but won't come crashing down.

"Those guys have been dead wrong for two years. Chanos said two years ago he was shorting China and it's going to collapse," Rogers tells CNBC.

"Every country, every family, every individual has setbacks as they rise. China is going to have some horrible setbacks. America had unbelievable setbacks as we rose."

Commodities are not only about to end their bull run but are going to come crashing down, says investor and author A. Gary Shilling.
Speculators and exchange-traded funds have fueled the buying spree, making the market volatile in the process.
China has supplied the...